Third Bidder Emerges for Energy Future's Oncor -- Update

A new bidder has emerged with a $9.3 billion offer for power-transmission company Oncor that could wrest it from a deal with Warren Buffett's Berkshire Hathaway Inc., according to people familiar with the matter.

The bidder's existence emerged in a late-scheduled court hearing on Friday, but the identity wasn't revealed, the people said. It was referred to as a large strategic company, the people said. The information came out as hedge fund Elliott Management Corp. was attempting to learn more about the bid in its efforts to block the Berkshire deal, the people said.

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A new offer would be the latest twist in the long-running saga of the fate of Energy Future Holdings Corp., the former TXU, which owns Oncor and has been in bankruptcy. Elliott is its largest creditor and was trying to organize its own restructuring.

Elliott is seeking to depose executives of Energy Future over the new bid, raising concerns the company could block a higher offer to push through Berkshire's deal, the people said.

Mr. Buffett's Berkshire had struck a deal to buy Oncor in a $9 billion deal last month. Elliott had sought to challenge Berkshire's deal by cobbling together one of its own, although the details of where that bid stands are unclear.

After months of amassing debt of Energy Future Holdings Corp., Elliott bought a strategic slice of notes that would ensure its ability to block the deal, people familiar with the matter said.

Berkshire has said it would walk away if its buyout offer wasn't approved next week. Paul Singer's Elliott says if Berkshire walks, Elliott will have an easier time raising money for a better deal for Oncor.

The fight for Oncor was set to come to a head Monday, a judge is scheduled to decide whether to greenlight Berkshire's $9 billion takeover offer. Before the emergence of a third bidder, the choice was between Berkshire, which has financing in place and the favor of regulators, and Elliott, which has been working to put together a rival deal that it says is worth hundreds of millions of dollars more for creditors.

Berkshire says Elliott hasn't shown it can line up the money to buy Oncor, and the hedge fund likely can't get approval from the Public Utility Commission of Texas, even if it does get the financing.

Energy Future has been stuck in bankruptcy since April 2014, and two earlier attempts to sell Oncor -- to Hunt Consolidated Inc. of Texas and Florida's NextEra Energy Inc. -- foundered due to action by Texas energy regulators. With money running short, Energy Future can't afford another failed deal for the business, its crown jewel.

Write to David Benoit at david.benoit@wsj.com and Dana Mattioli at dana.mattioli@wsj.com